Hertz-Dollar Thrifty deal facing issues with FTC: report
(Reuters) - Hertz Global Holdings Inc's $2.56 billion-bid for rival Dollar Thrifty Automotive Group Inc is facing resistance at the U.S. Federal Trade Commission (FTC), Bloomberg reported on Thursday.
The FTC's Bureau of Economics is opposing the Bureau of Competition's agreement with the car rental companies to approve the deal with conditions, Bloomberg reported, citing people familiar with the matter.
The Bureau of Competition is part of the FTC.
Howard Shelanski, the new director of the Bureau of Economics, is reviewing the case and has not submitted his office's formal recommendation to the commission, the news agency said.
Lawyers for Hertz and the FTC have started to prepare for litigation in case the antitrust regulator sues to block the deal, one of the sources told Bloomberg.
FTC spokesman Mitch Katz declined comment. Hertz spokeswoman Paula Riveria said the company does not have a comment at this time. Dollar Thrifty did not immediately reply to calls seeking a comment.
Hertz's shares fell 5 percent to $13.59. Shares of Dollar Thrifty fell 7 percent to $79, well below the $87.50-per-share offer from Hertz.
Hertz said earlier this month that the FTC had asked for more time to review its proposed takeover of rival Dollar Thrifty, further delaying a deal that has been in the works for over two years.
Hertz agreed not to close the deal before November 16. The deal was originally expected to close by October 31.
A potential takeover of Dollar Thrifty has been clouded by antitrust issues as a buyout would leave only three players controlling 95 percent of the U.S. car rental market.
Hertz, which first made an offer for Dollar Thrifty in 2010, had to back off due to a rival bid from Avis Budget Group Inc and antitrust concerns.
Hertz then decided to get a consent decree from the FTC before making a fresh offer. After more than a year of talks with the regulator, the company made an offer in August.
The companies have not included break-up fees or reverse break-up fees in their merger agreement, underscoring the level of confidence both companies have that the deal will win regulatory approval, people familiar with the matter have said.
In an effort to win antitrust approval, Hertz agreed to sell its Advantage brand, which competes with Dollar Thrifty in the low-cost segment of the market, to Franchise Services of North America and Macquarie Capital.
(Reporting by A. Ananthalakshmi in Bangalore; Editing by Saumyadeb Chakrabarty)
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